DP Money: Worried about With Profits Investments?; PERSONAL FINANCE -the independent view.

THE last three years have certainly been difficult for clients, companies,and advisers alike, says Gaynor Lythof Langmore James North Wales Ltd.

According to Gaynor, while many clients have seen their investments fall in value and are awaiting recovery,for those invested in Closed With Profit funds (whether bonds,pensions or endowments),it has to be questioned if this resurgence will ever come.

She reveals that many With Profit funds have already `spent'all or most of their reserves subsidising bonus rates declared to investors over the last few years, when falling equity markets have resulted in actual negative returns to these funds.

And she believes that not only might further falls in share prices render these funds insolvent,because of bonuses already promised over the last decade,even a modest return from the underlying investments might not be sufficient to keep With Profit funds viable.

Says Gaynor: ``As a result, some life offices have ceased to market With Profit investments,and many have changed the structure of their funds so that they invest almost entirely in Gilts.

``This is an attempt to ensure the fund's survival,not its prosperity. With average redemption yields on gilts currently running at around 4pc, it is easy to see why companies who have realigned in this way might not be able to pay sustainable yearly bonus rates in excess of 4pcper annum,less expenses -which we might assume to be 2pcpa. This sce-nario could therefore indicate distributable investment returns of just 2pc pa,going forward.''

Such actions may be at the expense of attractive long- term investment returns to policyholders. So what's the answer?

Gaynor warns against rushing to exit such funds without considering the various surrender penalties,death benefits, the term tomaturity,plus your current attitude towards investment risk. Therefore,any advice you seek should be highly personal and really does require the assistance of an Independent Financial Adviser.

Gaynor also points out that many IFAs have access to sophisticated investment tools that can analyse your investments against your current attitude to risk and help you to build a portfolio in keeping with your present objectives going forward.

By moving your investments onto one platform, she says you canal so greatly reduce the mass of paper work received during the course of a year to one simple valuation.

If you are concerned about your With Profits investment or any other investment,or would simply like an analysis of your portfolio,contact Gaynor or one of the IFAs listed on this page.

GAYNOR Lyth is a senior adviser at Langmore James North Wales Ltd,an appointed representative of Langmore James Associates Ltd, which is authorised and regulated by the Financial Services Authority.

CAPTION(S):

ADVICE:Gaynor Lyth,of Langmore James North Wales Ltd